After swaying between gains and losses, Indian benchmarks ended the week with marginal rise even as the 30-share Sensex touched its fresh two-year high on Friday.
Amid steady buying by foreign institutional investors, December quarter results guided the market direction even as some of the mid-cap and small-cap counters from the infra and realty space experienced sell-off after concerns related to their financial stability resurfaced.
The 30-share benchmark Sensex rallied 179.75 points, or 0.9%, on Friday to reclaim the 20,000-mark and closed at a fresh two-year high.
The broader Nifty, on the other hand, gained 55.3 points to end the week at 6,074.65, a tad lower than its Monday’s close of 6,082.3.
For the week, however, the Sensex added 65 points, or 0.3%, while the Nifty advanced 0.17% or 10 points.
Foreign Institutional Investors extended their purchases by $800 million , pushing their year-to-date buying to close to $3.3 billion even as domestic institutions sold about $685 million.
As per Morgan Stanley, with a receipt of $1.7 billion, India accounted for about 7% of the inflow in the emerging market funds in the year so far.
The week started on a positive note as the third quarter numbers of Reliance Industries pleased the Street with a higher-than-expected 24% growth in its net earnings for the period. The stock rallied more than 2% on Monday and settled the week at R911.9 , a gain of 1.4%.
The results of ITC, L&T and Maruti Suzuki provided bright spots for the market, adding to the hopes of recovery in the earnings growth for corporate India.
While ITC continued with its robust operating margin in the Cigarette unit, capital goods major L&T delighted the market with a strong y-o-y 14% growth in its order book during the period.
The net profit of Auto giant Maruti Suzuki more than doubled to R501 crore compared to the last year, its first increase in earnings after 18 quarters. All these three bluchips were the biggest gainers during the week; they advanced 3% to 5% during the period.
The top losers among the Nifty scrips, too, featured companies that disappointed the market with their third quarter earnings. Hindustan Unilever, the blue-eyed boy of the defensive space that ruled the market in the last two year with annual gains of 30%, reported lower-than-expected volume growth in three months to December at 5% . The company’s decision to increase the royalty payment to its parent Unilever to 3.15% of sales by fiscal 2018 weighed heavy on the stock, which fell 3% during the week after a dozen analyst downgrades.
Even Tata Motors faced some earnings downgrade after the company guided for lower Ebitda or operating margins for the period. The stock, which plunged 10% intra-day on Thursday, was the biggest loser among the Nifty stocks, with an 8% decline in the week to R301.05.
Thursday also saw heavy selling in debt-ridden infra, realty and capital goods companies from the mid-cap and small-cap space. Scrips like IVRCL, Lanco Infra, D B realty, IRB Infra and Punj Lloyd dropped 8-19% after investors turned cautious on reports of HDIL vice-chairman and MD Sarang Wadhawan selling 50 lakh shares.
About 98% of its promoters' holding remain pledged. HDIL stock dipped 32% to R82.5 in the week.